Corporate Governance in Family Businesses: The Role of the Non-Executive and Independent Directors
Affiliation(s)
1 Institute of Distance Learning & Continuing Education, Kumasi Polytechnic, Kumasi, Ghana. 2 School of Management & Economics, University of Electronic Science & Technology of China (UESTC), Chengdu, China.
1 Institute of Distance Learning & Continuing Education, Kumasi Polytechnic, Kumasi, Ghana. 2 School of Management & Economics, University of Electronic Science & Technology of China (UESTC), Chengdu, China.
ABSTRACT
The paper investigates the challenges faced by Non-Executive and Independent Directors in ensuring that good corporate governance practices are adhered to in non-listed Ghanaian family business at all times using non-listed family business in the Ashanti Region of Ghana. The findings revealed that the presence of non-executive and independent directors had no significant effect on the performance of non-listed family businesses in Ghana since they were dormant in most of the roles expected to be discharged by them and active in only few responsibilities or roles. It is also discovered that the boards of non-listed family businesses meet only when there is a problem to solve and not regularly. The owner-manager-chief executive office-board chairman, makes all decisions and ensures its implementation. The results draw the attention of policy makers to the position of non-executive and independent directors in family businesses given the enormous positive contribution they play to the economic development of the nations and their contributions to the society in general.
The paper investigates the challenges faced by Non-Executive and Independent Directors in ensuring that good corporate governance practices are adhered to in non-listed Ghanaian family business at all times using non-listed family business in the Ashanti Region of Ghana. The findings revealed that the presence of non-executive and independent directors had no significant effect on the performance of non-listed family businesses in Ghana since they were dormant in most of the roles expected to be discharged by them and active in only few responsibilities or roles. It is also discovered that the boards of non-listed family businesses meet only when there is a problem to solve and not regularly. The owner-manager-chief executive office-board chairman, makes all decisions and ensures its implementation. The results draw the attention of policy makers to the position of non-executive and independent directors in family businesses given the enormous positive contribution they play to the economic development of the nations and their contributions to the society in general.
KEYWORDS
Corporate Governance, Non-Listed Family Business, Non-Executive and Independent Directors, Ghana
Corporate Governance, Non-Listed Family Business, Non-Executive and Independent Directors, Ghana
Cite this paper
Sarbah, A., Quaye, I. and Affum-Osei, E. (2016) Corporate Governance in Family Businesses: The Role of the Non-Executive and Independent Directors. Open Journal of Business and Management, 4, 14-35. doi: 10.4236/ojbm.2016.41003.
Sarbah, A., Quaye, I. and Affum-Osei, E. (2016) Corporate Governance in Family Businesses: The Role of the Non-Executive and Independent Directors. Open Journal of Business and Management, 4, 14-35. doi: 10.4236/ojbm.2016.41003.
References
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http://dx.doi.org/10.1111/j.1741-6248.1993.00301.x [26] Miller, E.J. and Rice, A.K. (1967) Systems of Organization: The Control of Task and Sentient Boundaries. Tavistock, London. [27] Churchill, N.C. and Hatten, K.J. (1997) Non-Market-Based Transfers of Wealth and Power: A Research Framework for Family Business. Family Business Review, 10, 53-67.
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